Getting a quality education in many inner-city public schools can be a challenging venture at best, but until recently it was a virtual impossibility in the city of Chicago. “Nineteen years ago, then-Secretary of Education Bill Bennett declared our schools the worst in the nation, not something we were particularly proud of,” remarked Penny Pritzker, a billionaire member of the family that founded and controls the Chicago-based Global Hyatt Corporation, at a Philanthropy Roundtable K-12 education conference in April. Pritzker, a vice chairman of The Chicago Public Education Fund, then allowed herself a slight smile: “We have made significant progress since that point.”
Seven years ago, a group of corporate and civic leaders in the Chicago area believed they could help their home city do a better job educating its students, so they put their minds, financial assets, and talents together, and the result was The Chicago Public Education Fund.
The Fund’s board of directors reads like a who’s who of Chicagoans. Chairman Timothy Schwertfeger is head of Nuveen Investments, a 108-year-old firm managing $119 billion in assets. The Fund’s other vice-chair is Bruce Rauner of GTCR Rauner, a $6 billion private equity and venture capital firm. Other directors among the 27 on the board include Scott C. Smith, the founding chairman of The Fund and president of Tribune Publishing.
The Fund’s strategy is to serve as a catalyst and investment partner with community leaders, foundations, businesses and Chicago Public Schools (CPS) to invest dollars and ideas into high-impact programs that will improve student achievement and school leadership system-wide. “Anyone can create some pockets of success, but we wanted to focus our investments in such a way that we could achieve a system-wide impact,” says Janet Knupp, The Fund’s founding president and former director of Chicago Communities in Schools.
The Fund directs its investments by five guiding principles:
Effective collaboration with Chicago Public Schools (CPS) is perhaps the most crucial element in ensuring system-wide impact, according to Knupp. “Before we invest in any program area, we sit down with the chief executive officer of CPS, Arne Duncan, and his chief education officer, Barbara Eason-Watkins. We say, ‘Here are some key places where we think our infusion of dollars and ideas can actually add value to the system.’ We give them very specific goals. They either sign off on the strategy map for one of our four-year funds and help us quantify goals around that, or they don’t. In the first two cases, they signed off on it. We then sit down with the mayor and say, ‘Mayor Daley, here’s where we think there’s a key leverage opportunity for the private sector to be engaged.’ When the mayor’s office signs on, we think specifically about what that means for their level of engagement and/or investment.”
As for The Fund’s other partners, says Knupp, “we fundamentally and philosophically believe that the more people you can get to agree on programs that make sense for Chicago’s children, the more likely it will translate into results for the children.”
Many of these invaluable partners have been local foundations. “The Joyce Foundation (Philanthropy, May/June 2007) was one of the first foundations to commit significant dollars to The Fund. They played a critical role in helping us forge relationships with larger foundations across the nation. They saw the value of our work on a local level but had enough of a national reach to start connecting us. The McCormick Tribune Foundation was also one of our earliest and biggest supporters, and they’ve been part of strategic planning from the very beginning. Their senior vice president, Don Cooke, was in our office for a strategy session just a few weeks ago, working with our team. Paul Goren, vice president of the Spencer Foundation, is on our leadership council. And Sandra Guthman, president and CEO of the Polk Brothers Foundation, played a key role in helping assemble our initial board of directors.”
The directors made the decision early on to regard public schools like a business, a business whose product is well-educated children. Since the success of businesses largely depends on capable chief executive officers, the directors decided to focus their assets on developing effective leadership in public schools.
Their first major initiative was Leadership Fund I, a four-year $10 million fund launched in March 2000 that invested in programs dedicated to recruiting and retaining talented principals and teachers. One of The Fund’s most significant achievements was its “master teacher” plan, which helped Chicago increase the number of teachers with certification from the independent, nonprofit National Board for Professional Teaching Standards. That number grew from ten in 1999 to 379 in 2004, nearly doubling to 646 in 2006, with a goal of 1,200 by 2008. The Fund achieved this success in part through a $1.25 million commitment to a two-tiered incentive strategy: up to $3,000 for every teacher who achieved board certification and $30,000 to schools where teams of teachers achieved board certification. Leadership Fund I also drove policy changes which improved the quality of training aspiring principals receive by requiring that all Chicago Public School principal preparation programs combine business and education models, high admissions standards and rigorous internships. And it coordinated a comprehensive audit of CPS professional development spending, resulting in budgeting and accountability improvements.
The Fund’s venture philanthropy model was so successful, raising $10 million, much of which came from people who had never invested in education before, and leveraging $30 million more in private and public funding, that The Chicago Public Education Fund launched another four-year fund in 2004, Leadership Fund II.
This $15 million fund is building on the previous fund’s success by growing teams of talented teachers at individual schools. Leadership Fund II has increased collaboration among its programs to deploy teachers and principals effectively so that 244 schools to date—40 percent of all Chicago public schools—have three or more leaders supported by The Fund.
The Fund also helped CPS overhaul and improve the way it prepares principals. Penny Pritzker recruited some of Chicago’s most prominent executives to work with Arne Duncan and his staff on a Leading to Great Principals Blue Ribbon Task Force. “A consensus has developed over the last few years that a principal is the most important person in school building,” says Pritzker. “Just like a chief executive, the principal sets the tone, creates the culture, manages the team and ties it all together by articulating a shared vision for what the organization ought to be. So if we get the principal right, other things can fall into place, such as hiring good teachers, counseling out poor teachers, delegating through distributive leadership and building a cohesive team.”
The task force developed a rigorous set of eligibility standards for new Chicago principals, based on demonstrating competencies and performance through a portfolio and an oral interview, which are conducted by trained veteran and retired principals. “When the new standards went into effect in 2004,” says Pritzker, “there were 550 candidates in the pool. Only 330 of those candidates submitted their portfolio, and of those only 180 passed.” Since then, 250 candidates met the new requirements, and more than 170 have been hired since the new standards have been put in place.
Many people have wondered how The Fund has been able to make an impact with $25 million over eight years within a public school system with an annual budget of $4.4 billion. “People have come up to me recently and told me that they thought we would fail within the first year,” says Knupp of the organization that is now planning its third Leadership Fund.
“We have found that venture philanthropy is an effective model for addressing systemic issues in education, particularly in urban areas, and it has proven very instrumental in engaging people, many of whom have never supported education in the past, to commit dollars and energy to improving our public schools.”
With clear objectives and a focus on measurement, The Fund is able to show investors precisely what their dollars have accomplished. As a result, Fund-supported leaders have earned the opportunity to sit down at the table with potential investors and Chicago Public Schools leadership to determine the strategic investments that will be made, beginning in 2008.
Just as tiny seeds can grow into mighty forests, the programs seeded by The Fund are taking root and starting to bring about real, measurable change for the 440,000 public schoolchildren in Chicago.
Michael Leaser is the managing editor of Philanthropy
